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Bankruptcy Law/What happens to new money after bankruptcy

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Expert: - 11/13/2006


Question
I was hoping to settle some credit card debts when I received a settlement from an injury claim that happened a year ago.  When I called the company handling the claim he said that my injury was very small and it would be another year before I received anything or possibly nothing.

Now I'm considering bankruptcy.  I also owe on personal loans to friends and family.  My question is if I were to file bankruptcy now and receive a settlement at a later date, is there a time limit where that money would no longer be included in the bankruptcy.  If I did receive something after I filed bankruptcy I would like to use it to pay off my friends and family.  But, I wouldn't want someone coming after me for it after I already paid it out.

Answer
The injury claim is one of your assets, and whether or not your will be allowed to keep it depends on whether it is "exempt" from bankruptcy in the jurisdiction where you live. You really need an "in person" consultation with an attorney who is a bankruptcy expert. Most lawyers do not charge anything for an innitial consultation, so there is no reason to put this off.

You can get some background about exemptions and how they work by reading the Exemption section in my bankruptcy guide. Be sure to read all 3 sections, and then please contact an attorney. Go to:
http://www.debt-relief-bankruptcy.com/faq-browse11-5/bankruptcy-guide.asp

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Los Angeles Bankruptcy Lawyer Leon D. Bayer

Expertise

Leon Bayer has successfully represented clients in bankruptcy for over 30 years. He is frequently called upon by the media, the California Bar and other associations to provide insight and help educate attorneys on bankruptcy issues. If you or other readers want to keep up with my blog postings about life in and out of bankruptcy, you can follow my blog at http://www.bankruptcyblogger.org/ and my personal web site at http://www.debt-relief-bankruptcy.com and A Human Guide to Bankruptcy at http://www.thebankruptcyguide.net/ Leon also writes about bankruptcy law for Nolo, see http://www.nolo.com/law-authors/leon-bayer.html and his "Ask Leon" bankruptcy law blog column at http://blog.nolo.com/bankruptcy/

Experience

Leon is a Certified Specialist in Bankruptcy Law by the State Bar of California, and has been a practicing bankruptcy lawyer in Los Angeles, California for 33 years.

Organizations
National Association of Consumer Bankruptcy Lawyers, California Bar Association, Los Angeles County Bar Association.

Publications
Author, ?The Essentials Of Chapter 13,? Daily Journal Report, December 18, 1987.
Contributing Editor, Basic Bankruptcy, California Practice Handbook, Matthew Bender 1992, 1993.
CEB Consultant, CEB-Personal and Small Business Bankruptcy Practice in California, 2003.


Education/Credentials
B.A., J.D.

Awards and Honors
President, 1995-1996-Los Angeles Bankruptcy Forum; Member - Los Angeles County Bar Association Committee on Commercial Law & Bankruptcy, 1988. Law Advisory
Commission-Personal & Small Business Bankruptcy Law of the State Bar of California, 1996-2000

MR. BAYER SAYS: The big banks and credit card companys have been working overtime for many years to undermine the Consitutional right of the American people to be able to claim bankruptcy protection. In 2005 the banking lobby successfully convinced Congress and the President to make the laws and proceedures more complicated, hopeing that it will stymie legitimate people from filing bankruptcy. They succeeded in gaining these complex new legal proceedures by greasing the legislative system with hundreds of millions of dollars in "campaign contributions." The good news for the American people is that while the new laws have made the proceedures needlessly complex to the point where inexperienced people can't help but trip over the maze of new rules and regulations, the process is still doable, especially with a lawyer who is well trained and experienced in this specialty.

Past/Present Clients
I have probably handled something on the order of about 15,000 bankruptcy cases thropughout my career.

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